See related sidebar: IT Recruitment Not a Problem, Independent Community Bankers of America Survey Finds
Unemployment hit a 15-year high in October, reaching 6.5 percent, with 4 million people unemployed, the U.S. Labor Department reported in November. While the figures are discouraging for the economy as a whole (which now officially is in recession), they do beg the question of whether the notoriously difficult hiring market for financial technologists is now a thing of the past. New York alone, where Wall Street traditionally has formed a sizeable share of the economy, may lose as many as 165,000 jobs over the next two years, the city's mayor, Michael Bloomberg, recently noted.
The consensus among bank IT market observers seems to be that U.S. employers, particularly, now decidedly have the upper hand on employees -- added to which, offshoring to less expensive labor markets is expected to continue to grow unless the new administration checks the practice. Meanwhile, observers acknowledge that certain niche positions, such as Web security experts, require such specialized knowledge that they remain hard to fill.
Seven of BS&T's Elite 8 2008 technologists honored at the magazine's annual summit in late October said the current financial crisis will be good for recruitment (for more on the Executive Summit, see the photo gallery). Given a choice of three responses to the IT implications of significant banking layoffs in an informal survey, they answered, "There will be more available IT talent out there, meaning opportunities to upgrade IT organizations" over the options of "negative" or no effects on IT staffing.
The sole voice of dissent in our awards-night poll was Steve Kietz, EVP, growth ventures and innovation, with New York-based Citi ($2.1 trillion in assets). In a one-on-one interview following the Summit, Kietz explains his position from a banker's perspective: While the hiring manager may have new opportunities, he says, within the bank as a whole, "Layoffs kill morale." In those circumstances, retaining the best IT talent can become a challenge. [Ed. note: At press time, it was reported that Citi would cut 52,000 jobs in addition to 23,000 previously announced job cuts. According to Citi, most of the job losses will occur in New York and London.]
Speaking in his other capacity, as head of a new Citi mobile payments unit to be spun off next year, for which he is hiring 25 people, Kietz says, "It's amazing, the quality of people that are available, and not just from banks but in Silicon Valley." The CEO of Citi's Mobile Money Ventures elaborates: "I just hired a former director of PayPal, and I expect a lot of talent from the venture capital fallout. I've hired 15 extremely talented banking and Web 2.0 people, and I expect the opportunities to increase during this crisis."
Other industry participants agree to varying degrees. "It is a buyer's market," says Tom Kraack, a senior executive with Accenture who is based in Minneapolis. According to Kraack, Accenture works with its clients to help them recruit thousands of financial services employees annually, particularly technologists. Likening the job market to the stock markets, he says there are "strategic buying opportunities" for financial firms that survive the crisis.
Asked to rate the difficulty of hiring financial technologists now versus a year ago, on a 10-point scale with 10 representing the maximum difficulty, Ron Hoffer, a VP and senior audit manager with Union Bank of California ($60 billion in assets), says, "A year ago it was a nine; now it's maybe a seven." He adds, "It's going to be easier for us to find the talent we need."
Hoffer notes that Union Bank of California is "reaching out to folks from WaMu," even though Seattle-based Washington Mutual ($327 billion in assets), which was acquired by J.P. Morgan Chase (now $2 trillion in assets) in late September, is hundreds of miles from the San Francisco-based bank. Union Bank, he explains, has linked to "key individuals" at WaMu through industry peers.